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In 2022, Malaysia's economy recovered steadily, driven by an improving labor market and strong growth in foreign trade. However, several research institutes believe that Malaysia will face challenges in 2023 such as export and slowing economic growth.

Gross domestic product grew 9.3 per cent in the first three quarters of this year compared with the same period last year, according to Bank Negara Malaysia, the central bank. It forecast full-year economic growth of 6.5 to 7.0 per cent in 2022, up from 3.1 per cent in 2021.

In September, the World Bank raised its forecast for Malaysia's GDP growth in 2022 to 6.4 percent from 5.5 percent, citing improving labor market conditions, stronger domestic demand and an expected increase in domestic and international tourism-related activities.

In terms of foreign trade, Malaysia's trade volume grew 29.9% from January to November this year, with exports up 27.2% and imports up 33.3%, resulting in a 2.6% increase in trade surplus, according to a report by Malaysia's Ministry of International Trade and Industry. As of November, Malaysia's trade volume with China has maintained double-digit growth for 24 consecutive months.

Affected by the spillover effect of the interest rate hike of the Federal Reserve, Malaysia is also facing serious inflation. The country's consumer price index rose 4.5 per cent in the third quarter from a year earlier. The ringgit has been falling against the dollar, hitting its lowest level against the dollar since the Asian financial crisis in 1998 in September.

Looking ahead to 2023, some agencies are concerned that factors such as slowing world economic growth and reduced external demand will pose challenges to Malaysia's economic recovery.

Malaysia's manufacturing purchasing Managers' Index (PMI) fell to 47.9 in November from 48.7 in October, according to the latest report from S&P Global Markets Wisdom.

Bank Negara Malaysia (central bank) Governor Nur Shamsia Mohd Yunus said recently that the slowdown in world economic growth would bring external shocks, but Malaysia would still maintain its growth momentum, with GDP growth expected to be between 4% and 5% in 2023.

Analysts pointed out that China is an important trading partner of Malaysia and China-Malaysia economic and trade cooperation will continue to play an important role in Malaysia's economic development and transformation.

In the first three quarters of this year, Malaysia approved 130.7 billion ringgit (about 4.43 ringgit to the dollar) in foreign direct investment, with 49.2 billion ringgit coming from China, the largest share, according to the Malaysian Investment Development Authority.

Malaysian Transport Minister Luk Siu-fook said that the economic and trade prosperity between Malaysia and China cannot be achieved without the active participation and contribution of Chinese enterprises. Under the Belt and Road Initiative, a large number of high-quality, sophisticated and cutting-edge Chinese enterprises have entered Malaysia, injecting vitality and hope into Malaysia's prosperity and development.

Lu Zhaofu said that Malaysia encourages and welcomes more Chinese enterprises with high technology, energy conservation and environmental protection to come to Malaysia to help Malaysia achieve economic transformation and industrial upgrading. He hopes that Chinese enterprises will continue to contribute to Malaysia's economic development in technology transfer and job creation.